EUR/USD – Range Traders Make a (short-lived) Killing?
| March 3, 2010 | Posted by admin under Day Trading Ideas, Stock Market Analysis, Swing Trading Ideas |
This is your daily EUR/USD outlook for March 3.
On Tuesday the pair ever so briefly dipped below 1.3440. The sharp rebound showed that traders had little conviction in taking the EUR lower at that point. The false breakout allowed the range to stay in tact as the pair currently heads towards recent swing highs.
At this writing the pair trades at 1.3620. 1.3660 is resistance within the range followed by 1.3680 and 1.3700.
As mentioned in prior posts, trend traders should avoid the pair until a confirmed breakout occurs. Day traders will likely enjoy the large price swings within the range. That said, the EUR/USD is not an ideal currency for range trading over the longer term (info on that here: http://www.investopedia.com/articles/forex/10/range-trade-without-usd.asp).
1.3700 is significant resistance on the upside. As stated yesterday “Overall the pair remains in a downtrend. This will not be challenged until the pair gets over current resistance at 1.3700 followed by further resistance at 1.3800. The trendline approximately intersects this level. False breakout are a high probability. A break above 1.3700 accompanied by a pullback and then a renewed push higher would provide further confirmation of a continued upward correction. Interim resistance comes in at 1.3740-50 and 1.3780.”
Significant support on the downside remains between 1.3460-1.3430. Levels between this and 1.3700 are not high probability support/resistance levels. A break below indicates another leg down.
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[...] The EUR/USD broke above resistance at 1.3700. That pushed the pair up to interum resistance at 1.3740 (to 1.3750) on the way to the 1.3800 target as mentioned yesterday. [...]